India, the world’s third-largest energy consumer, is cutting solar-power costs to a record by forcing project developers into auctions, helping avoid the spiraling renewable-energy subsidies that have hurt Europe.

The lowest bid in India’s latest national auction on Dec. 2 came from Solairedirect SA, France’s second-largest producer, which offered to sell photovoltaic electricity at 7,490 rupees ($147) a megawatt-hour. That’s 38 percent below the average price set in a December 2010 auction and about 30 percent cheaper than the global average for solar projects.

Governments in Europe including Germany and Spain, the world’s largest solar-panel markets, this year cut above-market rates paid to all plant operators that led to ballooning costs amid an escalating debt crisis. India is staying ahead in driving down costs by forcing companies to compete on price.

“Astonishingly competitive pricing in the latest auction,” Anand Mahindra, managing director of Mahindra Group, whose solar unit won two of the 28 contracts awarded for the solar plants, said in a Twitter feed that was confirmed by his spokeswoman Roma Balwani. “The sun appears to be shining on India’s solar power program.”

Globally, power project developers on average demand to be paid $208 per megawatt-hour to build a solar plant, $78 for a wind farm and $76 for a coal plant, according to Bloomberg New Energy Finance levelized cost of energy analysis.